Professionalize as an Entrepreneur to Better Work with Investors (and Oneself)
It’s best to professionalize oneself as an entrepreneur before working with investors. The foundation of professionalization is the pursuit, consumption and use of readily available data and knowhow applicable to one’s venture — i.e, doing one’s homework and becoming an expert.
For example, a professionalized entrepreneur building a Business SaaS / Cloud Software company will read, internalize and use what’s written by David Skok, Jason Lemkin, Tomasz Tunguz, Steve Blank, Byron Deeter, the salesforce.com team, the Emergence Capital team, the Andreessen Horowitz team and others like them.
Professionalized Business SaaS entrepreneurs interview friends working in both early-stage and scaled-up SaaS companies. They continually inquire about the mechanics of general SaaS business operations and the workings of various business functions — from Distribution to Engineering to Products to Customer Success — within SaaS companies. They interview founders who tried and failed to create lasting SaaS companies and founders who succeeded in doing so. They ask their peers what they would liked to have known or listened to more carefully. Professionalized entrepreneurs research profiles of comparable companies, including newly formed, growing and public companies. They can picture the profiles of successful Business SaaS companies at every growth stage. They ask why other founders chose to bootstrap or to fund their companies via investors. Professionalized entrepreneurs ask peers about the metrics and benchmarks that matter for operational and fundraising success, their peers’ capital planning and fundraising experiences. They know what to include in a pitch deck, how to structure it and what other fundraising tools to create. They research and understand the dimensions and attributes of a typical fundraising cycle and what the fundraising experience feels like. They know how to price and structure their investment opportunity. They know which VC firms and which partners invest in Business SaaS ventures at their current stage (e.g., Series Seed) and the next stage.
In addition to immersion in the above category-specific research, content and knowhow (which is available for most company types — e.g., ondemand markets, ecommerce, media, consumer apps, fintech, healthtech, etc.), professionalized entrepreneurs immerse themselves in the wealth of foundational, educational content regarding building venture-funded companies that is offered by Y Combinator, Hacker News contributors, Quora contributors, Venture Hacks, Khosla Ventures, Sequoia Capital, Brad Feld & Jason Mendelson, Alexander Osterwalder & Yves Pigneur, Mattermark, Harrison Metal, Mark Suster, USV, Clement Mok, Steve Blank and others.
Professionalized entrepreneurs have the advantages of knowing:
- If the venture-funded journey is right for their company.
- What to expect in general.
- If their company’s performance matches those of other successful companies in their category.
- What they need to do to enhance their company’s performance and differentiate themselves.
- What big choices they face at each growth stage.
- If and to what extent they are ready to pitch investors.
- Who they should pitch.
- Convey commitment, confidence and determination.
- Speak a shared, inside-language and efficiently and effectively use the shared intellectual frameworks and analytical styles of their peers and prospective investors.
- Maximize the value of their interactions with investors, whether for gaining insight or funding.
- Maximize the value of their interactions with everyone in their field, the startup and the venture-funded company ecosystems.
And, they gain many more advantages similar to the above.
Most importantly, you are your first investor, and professionalizing yourself is an important way to ensure you invest your time capital well, optimally invest in yourself and maximize the opportunity to achieve the things that most matter to you.